Vodafone Idea surges 10% ahead of arbitration appeal deadline

According to a report Finance Minister Nirmala Sitharaman had, last week, discussed the matter extensively with senior bureaucrats, including secretary level officials and heads of concerned tax dept

Shares of telecom operator Vodafone Idea surged over 12 per cent to Rs 10.68 on the BSE in intra-day trade on Wednesday as the government remained uncertain on appealing against an arbitration award relating to retrospective tax demand against the company's British promoter Vodafone Plc. 

The deadline for appeal ends today.

At around 3.02 pm, the stock was trading 9.98 per cent higher at Rs 10.47, as against a 0.82-per cent rise in the BSE benchmark Sensex. In the past one month, the stock has added 1.92 per cent in comparison to a 5.11-per cent gain in Sensex.

On September 24, the Permanent Court of Arbitration at the Hague ruled that the Indian government seeking Rs 22,100 crore in taxes from telecom giant Vodafone — using retrospective legislation — was in "breach of the guarantee of fair and equitable treatment" under the bilateral investment protection pact between India and the Netherlands.

Meanwhile, according to a Business Standard report Finance Minister Nirmala Sitharaman had, last week, discussed the matter extensively with senior bureaucrats, including secretary level officials and heads of concerned tax departments. 

"The implications of challenging or not challenging the arbitration were discussed in detail. The minister was also apprised on various aspects of the case. However, the meeting remained inconclusive," the report said quoting a source privy to the discussion. READ HERE

While all arbitration orders have a time limit of 90 days for challenging them before a court in Singapore. However, legal experts said that since the deadline is not sacrosanct in the arbitration matters, the government can file an appeal later with condonation.

The views on an appeal are, however, divided as some sections of people in the government are not in favour of it.